Archive for June 2010

The rise in fuel prices in India has led the four Left parties – Communist Party of India (Marxist), Communist Party of India, All India Forward Bloc and Revolutionary Socialist Party – to issue the following statement:

The decision of the UPA government to inflict a steep rise in the prices of petrol, diesel, kerosene oil and cooking gas is a cruel blow against the people who are already suffering due to the runaway increase in the prices of food and essential commodities. The price of petrol has gone up by Rs. 3.50 per litre, diesel by Rs. 2 per litre, kerosene oil by Rs. 3 per litre and cooking gas by Rs. 35 per cylinder.
This callous decision of the government has come at a time when the food inflation rate is around 17 per cent and the general inflation rate has reached double digits. India has the dubious distinction of having the highest rate of consumer price inflation in the world.
The UPA government has decided to deregulate the price of petrol and leave it to the market to determine. Going by the Kirit Parikh Report, the government is going to decontrol prices of all petroleum products, including diesel. This is going to prove disastrous for the economy and the country.
The government is giving false arguments to justify these measures. The prices of petrol and diesel were increased by Rs. 3 per litre only three months ago at the time of the Union Budget. International oil prices have not risen substantially in this period. Neither is the government prepared to rationalize the taxation structure on petroleum products which is adding to a price of petrol and diesel in a large measure.
It is a myth that such a step is being taken to protect the public sector companies from under-recoveries. The so-called under-recoveries are entirely based on notional prices calculated without any reference to the actual cost of production. In fact, the deregulation is only to help private companies who withdrew from the market because of the government price controls. Now they will be free to enter the market to make profits.
By deregulating petrol prices, the government has opened the way for continuous increases in the prices of petrol. By increasing the price of diesel and kerosene oil, the farmers and the poorer sections are going to be badly hit. The LPG increase will further burden the middle classes.
The Congress-led government has shown its callous and anti-people character by these measures. The Left parties demand the immediate scrapping of the price increases. They call upon all their units to jointly launch protests against these hikes.

The statement is signed by Prakash Karat, General Secretary, CPI(M); A B Bardhan, General Secretary, CPI; Debabrata Biswas, General Secretary, AIFB; T J Chandrachoodan, General Secretary, RSP

Energy Bulletin, the peak oil + transition cultures + alternate economics online resource, has just posted my article, ‘Letters from America‘, in which an agriculture student from a small North Indian village writes home to his sister about the odd way of life he encounters during a stay in America. EB has described this as an updated Gulliver’s Travels. This is the first part:

Farm labour at work near Salinas, California

Dear Pooja, Imagine how surprised I was to see farms here that are so big, they disappear over the horizon! Papaji would not have believed it and nor would our uncles. I first saw them from the plane, and as I couldn’t judge how high we were, I didn’t know how big they were.

This I saw in the state of California, which is quite dry, like in our North India during April, but of course it is much cooler. They grow many vegetables here, and many flowers too. I wondered how they had so much water, because where there are no farms and no houses, there is desert.

They told me the water comes from the mountains, which are quite far away (at times I can see them to the east, and there’s a sparkle to some of their summits that could even be snow). How much they must have spent to move the water here – there is an enormous aqueduct (like our canals, but so much longer) that sends the farmers water.

Vegetables and fruit shop, Chinatown, San Francisco

What bothers me is that they waste quite a lot of it. You may think I am joking, but I have seen water being sprinkled all over big farms from sprinklers, like the ones some of the rich farmers have in our district, only of course here there are many more and they shoot out the water for hours at a time. Imagine what we could do with so much water for our crops – I wonder what they pay for this water, whether the poorer farmers also get any (don’t ask me if there are any, I don’t know yet).

You would also be amazed by how much machinery they use. I could make out a plough and a tiller, but other things I did not understand at all, what they do or how they work. Papaji would have been very angry to see so much machinery for use on the farm. The other elders too.

Remember when Jagdeep-chacha bought his first tractor (yes I know he first rented it with three other farmers) how Papaji and the others argued with him. “Machines distress the earth, our hands and feet must be in contact with Mother Earth if we ask her for nourishment,” I remember them saying.

Range of breakfast cereals in Los Angeles store

I used to see it as a natural kind of respect, and although – as I admitted to you but not to Ma and Papaji – I enjoyed riding on Jagdeep-chacha’s tractor when we went for fairs, I felt uncomfortable when that big heavy shiny noisy belching machine with huge tyres rumbled heavily across his fields. How could our soil bear such a monstrous weight, I would think, and what of all the thousands and thousands of little creatures that live in the soil and make it what it is, what would happen to them? Ma and Papaji and our brothers and sisters understood, but not everyone did.

But here, machines of all kinds are used on the soil. They dig, turn, roll, lift, crumble, bunch, furrow and level the soil. They treat the soil as it if was a kind of porous carpet that can be diced and shaped in any way they please. I find it very troubling, Pooja, that they do this. There is no respect.

Organic vegetable farm, Camarillo, California

The rows of vegetables look healthy and neat – beans, lima beans, oats, safflower, lettuce, what they call ‘salad’ which means a variety of greens. I don’t know how to react at times, there is so much of it. I was told the farms are in blocks of 100 acres, maybe more! Just imagine Pooja, where are we with our three and a half acres? But it’s not good to compare like that, as Papaji used to say, stick to what you know and can do and work on the land to the extent Mother Earth wants you to, without greed and without superiority. Still, this is so different it will take me some time to understand it. But it will be difficult.

The family I am staying with here in California are kind and explain whatever they can. Two days ago we talked about food and hunger, poor and rich. They told me that people in the state of California don’t know how poor other people are elsewhere in America. I said I did not know there were poor people in America, because the stories in our villages have always been of how easy it is to get rich here. But they explained to me that there are poor people, although what they mean by poor is quite different from what we and Ma and Papaji would understand.

Los Angeles urban built density

“If someone has only one TV and one old car, that’s poor,” said my host, and I was so surprised by this he started laughing. When I told him what we mean by poor he became very serious. “This country wastes too much,” he said. And I agree.

Yesterday we went to a shopping centre to buy me some walking shoes – don’t worry I’m looking after my money very carefully, the shoes were cheap.

Outside the shop we bought the shoes from was a rubbish bin. You won’t believe it Pooja, there was a man with his arms in the bin, looking for food. He was taking out small packets and bags that people had thrown inside, and in these he had found something to eat. I looked inside the bin too, but could only see more plastic bags and paper packets and cups – this kind of man must have the experience to judge what contains food.

Community Supported Agriculture (CSA) box, Camarillo, California

My host told me that every day, the average American “throws away about one-and-a-half pounds of food” (that means around 700 grams, they still use pounds here so I have to keep converting) and it is not that the food has gone bad. If lettuce has wilted only slightly, if a loaf of bread gets slightly hard because it has been left outside, even if an apple is a little discoloured through bad handling, they will throw it away! Yes I know you will say our city folk are wasteful too, but this amount of waste is different.

And yet I have heard of something they call ‘food stamps’ and ‘soup kitchens’, where the poor and homeless are fed. Ma would have been curious – these ‘food stamps’ and ‘soup kitchens’ are not managed by temple committees like at home but by small volunteer groups. I have been impressed by people willingly going to do such work: there is inequality and waste, that is true, but there is also concern and action.

One week of food for the Casales family in Mexico (Menzel and D'Aluisio, 2005)

This eclectic selection of reports does have one common theme. And that is a measure of desperation. The global triple crisis – that of finance and credit, of climate change, and of food and hunger – has pushed the poor to desperation, but it has also pushed companies and institutions to desperation. Desperate measures is what links the stories of a floating supermarket in Brazil, normally safe microloans going bad, fertiliser overuse in north India and Chinese tomatoes in Italy.

1. Nestlé’s ‘floating supermarket’ makes its voyages under Amazon skies. The ‘Terra Grande’ vessel is an investment by the Swiss food group designed to reach isolated riverside communities in the Amazon region. The vessel is designed to enhance Nestle’s reach among the lower income consumers that make up a core part of its market. The company has been in Brazil for 89 years and products like its powdered milk are staples among Brazil’s poorer consumers. As the economy continues to grow quickly, Nestlé is hoping that rising incomes among the poor will bring its higher priced goods within their reach, too.

2. Microfinance markets in Nicaragua, Morocco and Pakistan have seen default levels climb to more than 10 percent, the threshold that marks a “serious repayment crisis,” according to a February report from Washington, D.C.-based policy and research firm Consultative Group to Assist the Poor. Delinquencies in Bosnia and Herzegovina stayed below that level only because of “aggressive loan write-offs,” the report said. While there has been no evidence of a “widespread repayment crisis” in India, “a number of industry analysts have highlighted industry vulnerabilities,” the report said.

Here is a slice of Bloomberg’s reportage on the problem in India: “Savita Ramesh Rathore stood at the door to her dimly lit workshop in Mumbai’s Dharavi slum, filled floor-to-ceiling with bundles of old clothes, and tallied up the cost of her son’s wedding last year. ‘Jewels, clothes, food, the town hall,’ said Rathore, 50, who makes towels from discarded clothes. She borrowed 30,000 rupees ($645) from moneylenders charging 60 percent interest and took additional loans from friends to pay for the wedding. Three months ago, she got a 10,000 rupee loan from urban lender Hindusthan Microfinance Pvt. to repay some of that debt.”

One week of food for the Ayme family in Ecuador (Menzel and D'Aluisio, 2005)

3. A new study by Greenpeace Research Laboratories shows that agriculture in Punjab is on the brink of an ecological catastrophe, the result of the overuse of highly-subsidised synthetic nitrogen fertilisers by farmers striving to step up their output. Dr Reyes Tirado, a scientist from the University of Exeter, sampled wells in 50 villages in the areas of Muktsar, Bhatinda and Ludhiana, and found that 20 per cent had nitrate levels above the World Health Organisation recommended safety limit of 50 mg per litre.

Farmers are aggressively using the nitrate fertilisers with the aim of boosting their annual yield. But scientists warn that this overuse is gradually exhausting the soil, which will eventually leave it unfit for food production. PepsiCo, the cola company which also makes potato chips, sources potatoes from farms in Ludhiana, and lost no time in claiming fatuously that it encourages its agricultural suppliers to use less nitrogen-based fertilisers.

4. Italy’s agriculture minister declared “We will defend the Italian tomato” in response to reports by Coldiretti, an agricultural association, that Italian imports of Chinese tomatoes had soared by over 170 per cent in the past year and now made up 10 per cent of the country’s processed tomato market. Chinese tomatoes are being imported into Italy for processing into paste and then re-exported with an Italian label to countries like Ghana which buys about 28,000 tonnes from Italy each year. Chinese exports of food and drink to the EU have doubled over the past decade, reaching 3.2bn euros in 2009.

The OECD-FAO Agricultural Outlook 2010-2019 has just been released. A major joint document, this follows the regular, roughly ten-year wide focus series followed by both organisations on global agriculture. The new release has sections on food price volatility and the impact of commodity markets, and so will be of interest to the research and practitioner community looking at the finance-food-policy interfaces.

The Outlook says that demand for cereals for food and feed is projected to rise by one-third to 3 billion tons by 2050, and possibly higher due to a growing liquid biofuel market. Net cereal imports into the developing countries would increase almost three-fold to nearly 300 million tons by 2050, some 14% of their total cereal consumption. Demand for more income-responsive vegetable oils, meats and dairy products are expected to rise even faster. Livestock is one of the fastest growing sub-sectors in agriculture with over 80% of the projected growth in the next decade taking place in developing countries, particularly in Asia and the Pacific (especially China) and Latin America, outpacing growth in the OECD area by a factor of 2:1 over the next decade.

To support the necessary expansion in output in developing countries, FAO estimates the required average annual investment in primary agriculture and necessary downstream services (e.g. storage, processing) at USD 209 billion in 2009 prices (or USD 83 billion net of depreciation), much of which would come from private sources. Still, this amount represents a 50% increase from current levels and does not include the public investments required in such areas as roads, irrigation, electricity and education. In general since the 1970s, those countries with higher net investment per agricultural worker have been more successful at reducing hunger.

I’ve extracted three of the more interesting points from the Overview which prefaces the Outlook:

1. Average crop prices over the next ten years for the commodities covered in this Outlook are projected to be above the levels of the decade prior to the 2007/08 peaks, in both nominal and real terms (adjusted for inflation). Average wheat and coarse grain prices are projected to be nearly 15-40% higher in real terms relative to 1997-2006, while for vegetable oils real prices are expected to be more than 40% higher. World sugar prices to 2019 will also be above the average of the previous decade but well below the 29-year highs experienced at the end of 2009.

2. Developing countries will provide the main source of growth for world agricultural production, consumption and trade. Demand from developing countries is driven by rising per capita incomes and urbanisation, reinforced by population growth, which remains nearly twice that of the OECD area. As incomes rise, diets are expected to slowly diversify away from staple foods towards increased meats and processed foods that will favour livestock and dairy products. Also, with increasing affluence and an expanding middle class, food consumption in these countries should become less responsive to price and income changes, as is currently the case in OECD countries. This implies that larger changes in price and incomes will be required for consumption to adjust to any unforeseen shocks.

3. National and local emergency stockholding of key food security commodities, for food emergencies, particularly for low-income food importing countries, may increase confidence in the access to food in times of crisis and help stabilise local markets. Increased research, capacity building, and sharing of best practices to improve the functioning of emergency stock schemes are required. Whatever actions governments consider taking, it is always important to keep in mind the full set of policy measures, risks and possible responses for the targeted population.

Nearly 250 million people live within 50 km of India’s 8,000 km coastline. Eighty-seven cities and towns located in these coastal areas together dump 5.5 billion litres of wastewater into the sea every day. Less than a tenth of this water is treated, making the scale of pollution of our coastal ecosystems daunting.

India's coastal districts

Just as it is with worldwide species diversity, so it is with India’s coastal ecosystems and habitats — the growth in knowledge and understanding of both runs simultaneous with their destruction. Only from the early-1990s, when the oceanographic sciences became stronger in the country’s scientific matrix, and when multi-sectored studies and research began to be attempted as a means — perhaps the only way — of figuring out complex problems, has there been a general understanding of the large-scale dynamics of coastal circulation in the Arabian Sea and the Bay of Bengal.

To understand our coasts, the physical sciences combine with social sciences. Both work together: the anthropocentric social science view of global change complements the geocentric natural sciences view. Coastal zones are important for both, and it is in the last decade that such a convergence of understanding has begun to be explained. The trouble is, this understanding has come at a time of widespread economic growth and industrial expansion, so that as knowledge of India’s coasts (and our human impact on them) increases so too does the intensity and scale of the impact.

The scale is daunting. Most of India’s 8,000-km-long coastal regions are low-lying and densely populated, with nearly 250 million people living within 50 km of the coast, many of them in the 130 cities and towns that together form the engine of India’s economy, including Mumbai, Kolkata, Chennai, Goa, Surat, and Thiruvananthapuram (see map). Between 20-60% of the population in these individual settlement zones live in slums where they pursue their livelihood, and this section is automatically located in areas most vulnerable to natural disasters; areas that are already subject to periodic flooding.

At the same time, they are surrounded by a web of infrastructure that is becoming denser and more valuable every year: transport and freight networks, road and rail corridors, industrial zones and parks, maritime and port facilities, petroleum industries and refineries, import-based industrial and commercial domains — all located in coastal areas and competing for land and water with villages that have long depended on coastal resources for survival. That survival has always been relatively easy since coastal regions are home to a rich and varied biodiversity, they have had abundant rain-fed and groundwater resources, and they depended commercially on old trading centres. As the settlement mix changed, and as land use did too, India’s coastal talukas, tehsils and blocks either merged with a creeping mantle of urbanisation or warred with it. Either way, complex coastal ecosystems suffered.

Municipal wastewater constitutes the largest single source of coastal marine pollution. The Central Pollution Control Board estimates that 87 cities and towns located in India’s coastal areas in nine states together emit more than 5.5 billion litres of wastewater per day, which is almost 80% of their total water supply (the estimate in million litres per day, or MLD, which is the measure that water resource and pollution control authorities use, is 5,560.99 MLD).

This is a staggering volume of fluid, equivalent to a third of the total quantity of wastewater generated by 644 Class I cities and Class II towns in the entire country. It is also 2.5 times the volume of wastewater (about 2.2 billion litres/day) that the same 87 cities generated two decades ago. Of the 5.5 billion litres/day — less than a tenth (521.51 MLD) — is treated to any level before being released into coastal waters. The three states of Maharashtra (45%), West Bengal (26%) and Tamil Nadu (9%) account for the bulk of wastewater flushed into our coastal seas, while about 3.22 billion litres/day of wastewater flow into the Arabian Sea and about 2.33 billion litres/day flow into the Bay of Bengal.